Saturday, April 25, 2009

Increased Car Insurance Write-offs with Looming Recession

By Allen Jones

In the face of the current recessions and its probable long financial dry spell there have been reports of increased car insurance write-offs of cars. On top of that there were also increases in the number of car accidents which led to write-offs. This strange occurrence isn't confined to this recession but has also been observed in other times of economic contraction.

The thing is that this correlation between the write-off and amount of accidents happening makes no statistical or even logical sense if you look at it purely at the surface. There simply isn't anything physical that can link the two occurrences together. If you want to know the real reason behind this, you have to look further away from the surface of things and understand the nature of our fellow men that are put in a tight financial bind.

It is an unfortunate fact that some people in financial difficulties will turn to fraud and crimes just for the possibility of getting an insurance pay-off if they manage to con the insurance companies to write-off their cars. These people will actively damage their cars by smashing windows or setting fire to the engine-bay of their cars. Although the acts are despicable it is often hard to prove unless the criminal makes a very bad mistake and somehow make it obvious that they had a hand to play in the criminal acts.

There are a number of desperate motorist that actively get themselves into accidents by ramming their cars into other cars or even stationary things like fire hydrants in the hopes that they will inflict enough damage on the car so that the insurance companies will be forced to write-off the car and issue the individual a settlement check for the car's value. The sad fact is that most of these people do not properly think through these actions and end up on the losing end of the battle.

Some other individuals have even resorted to torching their cars or even reporting that it was stolen simply to get their car insurance claims come through better. These criminal acts are very obviously against the law and if even the slightest issue arises the insurance company is simply not going to pay your claims. There simply is no situation where you should ever be resorting to insurance fraud to either get a cash benefit or to get rid of you car.

Most of the time if you find that you are having a hard time servicing your car loans or even if you can't seem to sell your car and it is really becoming a liability, it still isn't worth it to resort to criminal acts and insurance fraud. You can sell you car for cheap and restructure your car loans in such a way that you can still pay them off effectively over time. If your car insurance is heavy then you can reduce your coverage or even changing your policy to a third party option.

At this stage you might be asking why this has any relevance to you. It does however impact you as a car insurance policy holder as car insurance companies will be faced with increased risk of these types of behavior from less than honest car insurance holders in your same insurance pool. The extra risk means that other honest car insurance policy holders will have to foot the bill thus affecting you with higher premiums. This doesn't only happen to one insurance company rather it happens to all in these recessionary times.

Basically it is due to these fraudulent activities of car insurance holders that have pushed car insurance quotes higher. There is nothing that you can do about it and you will simply have to accept that this is going to happen and understand that you aren't the only one that is getting an increase in car insurance premiums into the recession.

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